Charles Schwab, TD Ameritrade Haven't Halted Any Stock Trading This Week
30 January 2021 - 3:28AM
Dow Jones News
By Chris Wack
Charles Schwab Corp. said Friday that neither Charles Schwab
& Co. nor TD Ameritrade halted buying or selling any stocks
this week.
The financial company said neither firm restricted buying or
selling basic options, though both firms did adjust margin
requirements on select stocks to ensure clients had sufficient
assets to pay for stock purchases. Both firms also restricted
certain advanced options strategies, it said.
In recent days, certain stocks, including GameStop Corp. and AMC
Entertainment Holdings Inc., have become part of what is being
called a "short-squeeze," with volumes jumping and prices
fluctuating wildly.
Schwab said both firms put in place some restrictions on certain
types of options transactions to help mitigate risk. For example,
they aren't allowing clients to sell naked call options in order to
mitigate an unlimited risk situation. These decisions are based on
risk and volatility and are made on an individual security
basis.
Both firms, as normal course of business, review and alter
margin requirements in highly volatile securities. As margin
requirements increase, clients are required to hold more equity in
their accounts to make trades in these securities.
For GameStop, for example, both firms changed the requirement to
100%, thereby removing margin from the security. This process began
Jan. 13, and since that time, clients have been restricted from
using GameStop as collateral for a margin loan; before Jan. 13
clients could do so in a limited way.
Write to Chris Wack at chris.wack@wsj.com
(END) Dow Jones Newswires
January 29, 2021 11:13 ET (16:13 GMT)
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